BACOLOD CITY , Philippines — Importers who were able to sneak into the country smuggled sugar disguised as pre-mixed products are not yet off the hook, as the Bureau of Customs would soon impose taxes on these previous shipments.
Senator Juan Miguel Zubiri, in a phone interview the other day, said he met with Customs Commissioner Angelito Alvarez and Sugar Regulatory Administrator Ma. Regina Bautista Martin to tackle issues on pre-mixed sugar concentrates and pre-mix sugar products.
Zubiri said he informed Alvarez about this practice being done by some bottling companies, and they later agreed that, if the BOC determines the previous shipments as technical smuggling, then it will file necessary charges against both importers and consignees.
Alvarez said the BOC will file charges retroactive with the date of shipment, even those brought in last year, Zubiri said.
The issue on premix was raised last January to the SRA by the Confederation of Sugar Producers (CONFED), the largest group of sugar planters in the country. CONFED Negros-Panay chairman Raymond Montinola told Martin the entry of large volume of pre-mixed sugar has been one of the big reasons for the slowdown of sugar trading and the eventual drop of sugar prices.
Martin in turn assured sugar producers to resolve the issue, and last February 21 the SRA issued Sugar Order No. 6 improving the system of issuing premix clearance, using lab analysis on all shipments to differentiate sugar and premix."
The order also provides rules and regulations covering imports of sugar with added flavoring or coloring matter classified under Tariff Heading 1701 of the Tariff and Customs Code of the Philippines.
The BOC, on its website, said it has issued a directive ordering that all importations of pre-mixed sugar products will no longer be released by the agency without a validating certification issued by the SRA.
This new directive was issued in the wake of reports that unscrupulous importers had mis-declared their cane or beet sugar importations as pre-mixed sugar products to evade the payment of duties and taxes, said Alvarez.
Imported cane and beet sugar, on the other hand, is assigned a tariff rate of 50 percent if covered by a Minimum Access Volume Import Certification (MAVIC) and a much higher 65 percent if imported outside the prescribed quota.
"There is a need to stop the practice of misdeclaring cane or beet sugar as sugar-based food preparations not only to plug a major leak in the BOC's revenue collection but also to help maintain a balanced and rationalized supply of sugar vis-à-vis demand which is vital to the viability and survival of the local sugar industry," Alvarez said.
In a Customs Memorandum Order, dated March 3, Alvarez made it clear that "import shipments declared as premix commodities/food preparations but found after laboratory analysis to be raw sugar or refined/white sugar shall be recommended for seizure."
The SRA had the mandate to monitor and validate the declared classification and quantities of all imported pre-mix commodities, their dates of arrival, countries of origin and the names of their importers and consignees, he said.
The SRA is also mandated to assist the BOC and the Bureau of Internal Revenue in the determination of the appropriate classification of sugar and sugar products for purposes of imposing proper import duties and/or assessing value-added or other taxes thereon.
Zubiri said: "Under their system, the BOC will seize the questionable shipment, pending the SRA certification if the shipment is a premix with zero tariff or premix with tariff. If the SRA certifies that the shipment has a sugar content of 80 to 90 percent, it will be classified as sugar importation, and will be taxed accordingly."
The senator said the BOC and SRA orders would "level the playing field for sugar farmers," improve the prices of sugar in the market, and result in compatible, comparable, and competitive pricing of sugar locally.
These orders, however, are being contested by some bottling companies, Zubiri added.